Reduction In Car Prices Post GE-13 - Truth Or Fiction?

Newspapers are more reliable sources of information than online media and the public should be wary of the authenticity of information posted on websites, Facebook and blogs - this is an often repeated message by our government. In the preceeding weeks before the 13th general election, strategy advisor for the Malaysian Communications and Multimedia Commission Sheikh Ahmad Raffie warned the public “Any information should be verified by official sources. Don't accept any news on the Internet as the complete truth."

Ironically, it was Utusan Malaysia, one of the oldest newspaper title in the country, that is finding itself at the centre of attention for causing unnecessary confusion among car buyers with a grossly incorrect front page story on 10-June 2013.

In an infographic accompanying its cover story "10 model kereta turun harga," (Prices reduced for 10 car models), the daily claimed that prices for 10 car models have been reduced by up to 11 percent thanks to the ruling government fulfilling its pre-election manifesto to lower new car prices.

The daily went on to claim that the first phase of price reduction for Peugeot, Proton, Perodua, Volkswagen and Honda models have already begun, and that the reduction is part of the government's long term plan to gradually reduce car prices between 20 to 30 percent until 2017.

Readers who follow the new car market closely were quick to spot that the prices for all but two models mentioned were incorrect. However, some less savvy buyers who may not know any better were upset with their car's sales advisor, whom they think have failed to inform them of an impending reduction in their vehicle's price.

As a result, car companies had to scramble their public relations machinery to explain to their customers on what is happening.

Perodua for example, had to arrange for an impromptu press conference on Tuesday to clarify the ownership cost of Perodua vehicles.

To date, Utusan Malaysia has yet to publish a correction to its cover story. Not only that, the daily continued to repeat the same factually wrong message in its subsequent article on the 2013 Proton Saga FLX SV launch. It also repeated the same message again when Perodua hosted a press conference to clarify that there was no reduction in the price of Perodua vehicles.

Perodua's president and CEO Datuk Aminar Rashid Salleh said "With regards to the article on Utusan Malaysia titled “10 Model Kereta Turun Harga” on page one dated June 10, Perodua wishes to clarify that the reduction mentioned is referred to the reduction to the cost of ownership, as well as improving the value proposition to our customers with the introduction of the S-Series as well as the three-year free service package for all our vehicles.”

Perodua's official clarification was omitted by the news daily, which reported the proceedings of the conference with the headline "Perodua akui penurunan harga," (Perodua acknowledges reduction in prices).

Understandably, car companies are cautious in responding any further and wished to avoid being drawn into any politically charged debates.

Volkswagen Group Malaysia clarified that the nett selling price for the 2013 Volkswagen Golf 1.4 TSI has always been RM157,888 (excluding insurance). Nasim, the authorised distributor of Peugeot vehicles in Malaysia declined to comment but said buyers can verify the prices by looking at the price list posted on its website.

The spread of such misinformation is very harmful to the industry. New car sales in Malaysia have been dropping for two consecutive months since April, when both sides of the political divide succumbed to populism and engaged in an unproductive race to the bottom by dangling promises of cheaper cars to voters, never mind the fact that neither the government nor the oppossition's manifesto will not stand a chance against a critical review by industry professionals.

Below is a summary of the errors made by the news daily, and the correct selling price for each of the 10 models mentioned.

Peugeot 308

For the Malaysian market, Nasim offers the 2013 Peugeot 308 in two variants, the 308 Turbo and 308 VTi. There's also a limited-edition 308 Turbo Griffe but as this is only limited to 308 units, we will not dwell too much on this variant.

As far back as 2012, the 308 VTi has always been selling at RM102,888 (on the road). The 308 Turbo, sells for RM121,888 (on the road), no change from 2012. The extra RM20,000 plus buys the 308 Turbo two more gear ratios, 36 bhp more power, 80 Nm more torque, sporty white instrument dials, a rear spoiler and leather wrapped three spoke steering wheel.

It appears that the news daily was confused between the two variants. How Utusan Malaysia came to understand the RM115,663 price remains a mystery.

Volkswagen Golf

The current 2013 Volkswagen Golf is the seventh-generation model. As far back as 2012, when the previous sixth generation model was still on sale, the Golf 1.4 TSI has been priced at RM157,888 (excluding insurance). The all-new seventh generation 2013 Volkswagen Golf 1.4 TSI on sale today continues to carry the same selling price.

How Utusan Malaysia came to understand the RM169,888 price remains a mystery.

Perodua Viva

This is the one of the two model that Utusan Malaysia got it correct. The 2013 Perodua Viva S, priced at RM35,174 (on the road, automatic transmission, metallic colour) replaces the Viva 1.0 Standard. The now discontinued variant used to sell for RM37,162.

The Viva S is not only cheaper, but also features a higher list of features including power assisted steering, MP3 format compatible audio system and vanity mirror.

It is important to differentiate between introduction of a new base model variant and reduction in a model's selling price. To say that prices of Perodua Viva models has been reduced simply because an additional lower priced variant is introduced is just stretching the truth.

Perodua Myvi EZ

The 2013 Perodua Myvi is Malaysia's bestselling car. The Myvi EZ (Standard) is the base automatic transmission model. When this second-generation Myvi was introduced in June 2011, it was priced at RM46,900 (on the road, solid colour).

In 2012, the price was reduced slightly to RM44,924, which remains until today.

The closest variant to Utusan Malaysia's claimed RM50,424 price is probably the Myvi EZi (Premium, solid colour), which used to sell for RM49,912. This model has since been discontinued, succeeded by the RM48,424 (on the road, metallic, automatic transmission) Myvi 1.3 SE.

Proton Persona

In this context, the price of a 2013 Proton Persona is a non-issue. Proton Edar has not updated the Persona's price list since July 2012. Between the last two years, the Persona Elegance Standard automatic transmission has always been priced at RM51,113.

Why this model is even included is a mystery.

Perodua Alza

This is the only other model that Utusan Malaysia got it right. The 2013 Perodua Alza S, priced at RM 57,017 replaces the previous Alza Standard. The Alza Standard with automatic transmission and special metallic paint used to sell for RM59,203.

As we mentioned earlier, introduction of a new lower range variant cannot be equated to reduction of car prices across the model range.

Proton Preve

Like the Persona, Proton Edar has never changed the selling price for the Preve since its launch in April 2012. The 2013 Proton Preve Premium CVT still sells for RM72,990 (on the road, metallic colour).

Honda Jazz

This is another model that had saw its selling price reduced. However, it is important to remember that this reduction is achieved via local assembly and revision in the car's specifications list. One should avoid making direct comparisons between the fully-imported-from-Japan Jazz Hybrid (on sale until December 2012) against the locally-assembled model launched in November 2012.

The imported 2012 Honda Jazz Hybrid used to sell for RM 94,800 (on the road) and not RM 92,187 as claimed by Utusan Malaysia. The Japan-built model has since been succeeded by a locally-assembled (in Honda's plant in Pegoh, Melaka) 2013 Honda Jazz Hybrid CKD model priced at RM 89,900.

Differences in specifications include airbags (reduced in six in the imported model to two in the locally assembled model), deletion of features like steering wheel mounted audio control buttons, paddle shifters and rear disc brakes (current model has drum brakes in the rear).

Proton Saga

There has been no change in the 2013 Proton Saga FLX's selling price since last year. The Saga FLX 1.3 CVT Standard is still selling for RM41,811.

Compared with the Saga FLX Standard, the SV variant has several items have been deleted from the specifications list, including first aid kit, safety triangle, jumper cables, luggage tray, door visor, trunk lid cover, exhaust tip finishing. It does however feature additional passive safety features like structural reinforcements and dual front airbags. There is still no active safety ABS though.

Proton Exora

We will save the best for the last. There are no changes in prices for 2013 Proton Exora Bold models. Taking a glance at the Exora's price list, it quickly became clear that Utusan Malaysia was confused between the price of a Proton Exora Bold Executive in solid paint with the price of a metallic paint option model. How that is even construed to imply a reduction in price is another mystery.

As someone who appreciates cars not just for their horsepower value but also for their cultural significance, he is interested in the art of manufacturing and selling cars just as much as driving them. Prior to swapping spread sheets for a word processor, he spent his previous life in product planning and market research.